Ten warns on advertising slowdown

chris

Australia’s advertising market is showing signs of a faster slowdown than most had been predicting, as the brakes are applied to an inflation-hit economy. Ten Network on Friday (June 13) issued an earnings downgrade, causing consternation among some analysts who said any slowdown was yet to become apparent.

Ten is forecasting that EBITDA for the company’s full year 2008 (to the end of August) will fall by around 10% compared with the A$237 million in 2007. Ten’s shares fell over 10% on the day.

Ten Holdings’ executive chairman, Nick Falloon (pictured, above) said: “At the time of our half year result in late March 2008, we noted that the television advertising market was remarkably resilient despite the prevailing economic conditions and, at that point in time, revenue growth was tracking well.

“Recent further deterioration in external economic conditions is now adversely impacting the free-to-air television advertising market in Australia.”

The fourth-quarter fall – not helped by advertising dollars likely to flow to rival Seven Networks’ Olympic Games coverage – is likely to be harsh as in Ten’s financial year-to-date, revenues have risen seven per cent, from A$598 million in the previous nine months to end-May, to A$641 this year. EBITDA is up from A$177 million to A$202 million.

Falloon added that costs remained “firmly under control”, tracking in line with guidance of within five per cent growth for the full year. "In addition, we remain confident that Ten will increase its share of revenue during the current half-year period to 30 June 2008 and we are pleased with the Network's improved ratings performance,” he said.


Source: Rapid TV News